MPs: Amazon must tackle sellers’ £1.5bn VAT dodge

INTERNET giants Amazon and eBay and the taxman must do more to stop rogue traders defrauding taxpayers of up to £1.5billion a year, MPs say.

Online sellers based overseas can dodge VAT they should charge on sales in the UK, allowing them to undercut British firms, a parliamentary report shows.

they can charge 20 per cent less than UK companies. But Amazon and eBay still earn commissions ‘and therefore profit from people who are defrauding the British taxpayer’, the Commons Public Accounts Committee said.

Committee chair and Labour MP Meg Hillier said: ‘Online VAT fraud is hugely damaging yet, as online sales continue to grow, the response of HMRC and the marketplaces where fraudsters operate has been dismal.

‘HMRC needs to be far tougher in protecting the interests of British businesses and taxpayers. As a priority it must inject more urgency into enforcement action. But it should also push the case for further new powers.

‘Online marketplaces tell us they are committed to removing ‘‘bad actors’’, yet that sentiment rings hollow when those same marketplaces continue to profit from the actions of rogue traders.

‘they can and should do more to drive them out and we will expect online marketplaces to co-operate fully with Hmrc in tackling non-compliance.’

An eBay spokesman said it has been working with HMRC and ‘going above and beyond their requirements’. Amazon said it is reviewing the committee’s recommendations and backs efforts to ensure businesses are Vat-compliant.